The jump was partly due to a large increase in government spending.
The figures are the one of the last pieces of important economic data before the US presidential election between Barack Obama and his challenger Mitt Romney on 6 November.
Federal government expenditures and gross investment increased 9.6% compared with the previous quarter, while national defence spending rose by 13%. The Commerce Department said there was a jump in personal consumption as well.
A drought in the US, which was the worst for 50 years, cut farm output and took 0.4 percentage points off the GDP figures, the Commerce Department said.
With more than 20 million Americans unemployed and a huge public deficit, the economy has become one of the central issues of the campaign.
The US has now been growing for more than three years, since June 2009.
“Growth came in a little higher than we had feared, largely because of the big jump in federal spending,” said Paul Ashworth, chief US economist at Capital Economics.
“But the economy is still not growing rapidly enough to create sufficient jobs to reduce the unemployment rate.”
Economic fightMr Romney has repeatedly challenged President Obama’s record, saying ”we have not made the progress we need to make”.
“If the president were re-elected, we’d go to almost $20 trillion (£12.4tn) of national debt. This puts us on a road to Greece,” Mr Romney said during the second presidential debate.
Mr Obama replied that his opponent did not have a five-point plan to fix the economy, but ”a one-point plan”.
Last month, the US unemployment rate fell to 7.8%, down from 8.1%, its lowest since January 2009 when Mr Obama’s term in office began.
Nigel Gault, chief US economist at IHS Global Insight, said: “There is prospect that we could do better next year if we could clear up some of the uncertainties, particularly the fiscal cliff.
“A lot of the ingredients for stronger growth are falling into place, particularly the gradual easing of credit conditions and the improvement in the housing market.”
The “fiscal cliff” refers to automatic tax hikes and government spending cuts that were agreed by Democrats and Republicans during the last budget face-off, which will drain about $600bn out of the economy next year unless action is taken by Congress.
Low interest ratesTo help get the US economy back on track, the US Federal Reserve in September restarted its policy of pumping money into the economy via quantitative easing. The Fed pledged to buy $40bn of mortgage debt a month, with the aim of reducing long-term borrowing costs for firms and households.
“Growth was fairly resilient,” said Christopher Vecchio, a currency analyst at DailyFX, but “nevertheless, this is still not the stable recovery the Federal Reserve is looking for”.
Recent housing data has also shown some encouraging signs of recovery, analysts say.
Sales of existing homes and housing construction have picked up and the main home price index has risen consecutively for three months.
House prices have rebounded in some areas, while mortgage rates are expected to stay at record lows because of low interest rates.
The Fed has vowed to keep rates at the current levels of close to zero until 2015.
The economy grew by 1.3% in the previous quarter. The US states its growth in annualised terms, meaning that its quarterly growth rate is extrapolated as if it was growing at that pace for the whole year.
What is your experience of the US economy? Have you recently found a job? Or are you unemployed? Have you found borrowing easier? Send us your comments using the form below.